- Movie theaters have been rocked by the pandemic, but are on a path to recovery.
- Experts say the performance of “A Quiet Place Part II” and Warner Bros.’ releases are positive signs.
- Disney’s “Black Widow” strategy was beneficial, but studios still need theaters.
Movie theaters in the US were devastated by the pandemic and they’re still facing immense struggles.
Tentpole releases that Hollywood studios delayed until this year aren’t showing the kind of legs needed to drive a significant box-office recovery. In “Black Widow’s” case, it was also released on Disney+ for an additional fee, a potential alternative model that could put pressure on theaters.
And theaters are also lacking exclusive animated family films like Pixar’s “Luca,” which went straight to Disney+, that could boost ticket sales (Warner Bros.’ “Space Jam: A New Legacy,” which topped the box office over the weekend, may be an exception, but it’s also streaming on
But the box office has also shown some signs of positive recovery. And industry insiders say there are still key reasons to be optimistic.
“I’m not in an industry looking to be saved,” said Chris Johnson, CEO of the Illinois-based theater chain Classic Cinemas.
‘A Quiet Place Part II’ is holding strong at the box office
Johnson said that “A Quiet Place Part II,” the sequel to 2018’s horror hit, is the “perfect example” of a release strategy that worked.
“When you can cultivate an event, you definitely raise the value of that property and the excitement around that property,” he said.
“A Quiet Place Part II” is one of the only films to perform at pre-pandemic expectations at the domestic box office (it helps that it had a $60 million production budget compared to the mammoth budgets of something like “F9,” which cost more than $200 million to make).
So far, the movie has earned $155 million at the domestic box office; the first movie ultimately grossed $188 million. But it’s still going strong even after becoming available to stream on Paramount+ and rent on premium video-on-demand (PVOD) platforms after a shortened exclusive theatrical window.
Paramount hasn’t released figures for the movie’s streaming or PVOD performance, but it topped Vudu and FandangoNow charts last week and is currently the No. 3 movie on iTunes.
“Streaming and PVOD can be bolstered by a big theatrical release,” Johnson said.
But that doesn’t necessarily mean that streaming hurts the box office, either.
There are signs that streaming and theaters can co-exist
When Warner Bros. announced in December that it would release all of its 2021 movie to theaters and on HBO Max simultaneously, it received intense backlash within Hollywood. But the strategy meant that Warner Bros. has been the one studio with a regular supply of movies going to theaters while also boosting Max.
“Godzilla vs. Kong” opened in March with a then pandemic-best opening of $48 million. It ultimately earned $100 million at the domestic box office, a sluggish result given its $200 million budget but still on par with its predecessor, “Godzilla: King of the Monsters.”
The latest Warner Bros. movie to hit theaters and Max, “Space Jam: A New Legacy,” dethroned “Black Widow” at the top of the domestic box office over the weekend with $31 million. It has a chance to repeat at No. 1 this weekend even with new films like M. Night Shyamalan’s “Old” and the G.I. Joe movie “Snake Eyes” hitting theaters.
In response to “A New Legacy’s” opening, Exhibitor Relations media analyst Jeff Bock tweeted, “Please, tell me again how WB’s day-and-date streaming on HBO Max is killing theaters.”
Studios, including Disney, still need theaters
The Wall Street firm Cowen contended in a report this week that Disney’s “Black Widow” strategy was the right call, noting that while the box office took a 27% to 35% hit from the day-and-date release, it was a “positive tradeoff” for the company given that it keeps nearly all of the Disney+ sales.
But the firm also questioned whether the model would benefit Disney in the long run to risk doing further damage to the theatrical industry.
“If the theatrical footprint were to shrink significantly, Disney’s overall box office would likely take a more damaging hit, one that potentially can not be covered by PVOD,” the report said.
The future of theatrical distribution will likely look less like the current Disney or Warner Bros. day-and-date model, but more akin to what Universal is doing. The studio has struck deals with theater chains to dramatically shrink the theatrical window from the traditional 75 days to as little as 17 days.
Warner Bros. is expected to do the same starting next year with a 45-day window (while also making original movies exclusively for Max).
“While Disney only has one more film on its slate scheduled for a dual-window release (July 30’s ‘Jungle Cruise’), they (and their peers) are going to have to do some serious thinking about the best long-term strategy to protect overall film economics,” the Cowen report said.
This is part two of a two-part series on the state of the theatrical industry. Read the first part: Movie theaters could already be living in their nightmare scenario
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